26 U.S. Code § 2040 - Joint interests

The value of the gross estate shall include the value of all property to the extent of the interest therein held as joint tenants with right of survivorship by the decedent and any other person, or as tenants by the entirety by the decedent and spouse, or deposited, with any person carrying on the banking business, in their joint names and payable to either or the survivor, except such part thereof as may be shown to have originally belonged to such other person and never to have been received or acquired by the latter from the decedent for less than an adequate and full consideration in money or money’s worth: Provided, That where such property or any part thereof, or part of the consideration with which such property was acquired, is shown to have been at any time acquired by such other person from the decedent for less than an adequate and full consideration in money or money’s worth, there shall be excepted only such part of the value of such property as is proportionate to the consideration furnished by such other person: Provided further, That where any property has been acquired by gift, bequest, devise, or inheritance, as a tenancy by the entirety by the decedent and spouse, then to the extent of one-half of the value thereof, or, where so acquired by the decedent and any other person as joint tenants with right of survivorship and their interests are not otherwise specified or fixed by law, then to the extent of the value of a fractional part to be determined by dividing the value of the property by the number of joint tenants with right of survivorship.

(b) Certain joint interests of husband and wife

(1) Interests of spouse excluded from gross estate

Notwithstanding subsection (a), in the case of any qualified joint interest, the value included in the gross estate with respect to such interest by reason of this section is one-half of the value of such qualified joint interest.

(2) Qualified joint interest defined

For purposes of paragraph (1), the term “qualified joint interest” means any interest in property held by the decedent and the decedent’s spouse as—

(A)tenants by the entirety, or

(B)joint tenants with right of survivorship, but only if the decedent and the spouse of the decedent are the only joint tenants.

1981—Subsec. (a). Pub. L. 97–34, § 403(c)(2), substituted “joint tenants with right of survivorship” for “joint tenants” in three places.

Subsec. (b)(2). Pub. L. 97–34, § 403(c)(1), in redefining “qualified joint interest” substituted provision defining term as meaning any interest in property held by the decedent and the decedent’s spouse as tenants by the entirety, or joint tenants with right of survivorship, but only if the decedent and the spouse of the decedent are the only joint tenants for provision defining the term as meaning any interest in property held by the decedent and the decedent’s spouse as joint tenants or as tenants by the entirety, but only if such joint interest was created by the decedent, the decedent’s spouse, or both, in the case of personal property, the creation of such joint interest constituted in whole or in part a gift for purposes of chapter 12, or in the case of real property, an election under section
2515 applies with respect to the creation of such joint interest, and in the case of a joint tenancy, only the decedent and the decedent’s spouse are joint tenants.

1962—Pub. L. 87–834struck out provisions which excepted real property outside of the United States.

Effective Date of 1981 Amendment

Amendment by Pub. L. 97–34applicable to estates of decedents dying after Dec. 31, 1981, see section 403(e) ofPub. L. 97–34, set out as a note under section
2056 of this title.

Effective Date of 1980 Amendment

Amendment by Pub. L. 96–222effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978, Pub. L. 95–600, to which such amendment relates, see section 201 ofPub. L. 96–222, set out as a note under section
32 of this title.

Amendment by Pub. L. 87–834applicable to estates of decedents dying after Oct. 16, 1962, except as otherwise provided, see section 18(b) ofPub. L. 87–834, set out as a note under section
2031 of this title.

Consideration Given Before July 14, 1988 by Decedent to Noncitizen Spouse Treated as Originally Belonging to Spouse

Pub. L. 101–239, title VII, § 7815(d)(16),Dec. 19, 1989, 103 Stat. 2419, as amended by Pub. L. 101–508, title XI, § 11701(l)(3),Nov. 5, 1990, 104 Stat. 1388–513, provided that: “For purposes of applying section 2040(a) of the Internal Revenue Code of 1986 with respect to any joint interest to which section 2040(b) of such Code does not apply solely by reason of section 2056(d)(1)(B) of such Code, any consideration furnished before July 14, 1988, by the decedent for such interest to the extent treated as a gift to the spouse of the decedent for purposes of chapter 12 of such Code (or would have been so treated if the donor were a citizen of the United States) shall be treated as consideration originally belonging to such spouse and never acquired by such spouse from the decedent.”

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